Thursday, April 19, 2007

'Struggling to Find Qualified Buyers' in Sacramento

From Reuters:

D.R. Horton Inc., the largest U.S. home builder, said on Thursday quarterly earnings fell 85 percent, in part due to charges related to the lower value of land.
The results included charges totaling $81.2 million, or 16 cents per share for land options forfeited and for the lower value of inventory of land and houses it owns.

"We believe that there will be continued softness in '08, and I would expect that we'll continue to adjust our inventories downward in the first two quarters of '08," Tomnitz said.

About 80 percent of the impairment charges were related to California projects, particularly in Sacramento.
From the Associated Press:
The weak market will linger into 2008 and could get worse before it improves, he said, blaming some of the company's troubles on high home prices and high costs for builders in California.

"We're struggling to find qualified buyers" in Sacramento and San Diego, Tomnitz said. "The only way we can increase that pool of affordable buyers is to make a product more affordable and lower average sales prices."

Tomnitz said the company had cut prices in California in the past month after trying to hold them steady.


norcaljeff said...

That quote in the DRH article is amazing, pretty much sums it all up. So they don't have a lot of buys obviously, but the ones actually sticking their necks out to buy can't even qualify.
Sippin, where's the silver lining, I'm sure you'll find/creat one :)

Patient Renter said...

85 percent drop in earnings! Wow. I guess the silver lining is that it wasn't 90%.